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Old 30-12-2010, 11:49   #1
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Avoiding Sales Tax

My wife and i are in the process of purchasing a sailboat in California and are wondering if we can avoid paying the sales tax.. We are legal residents of Florida... The boat is now is California... and what about the documentation and advise on this also.... thanx ur help...pn
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Old 30-12-2010, 13:04   #2
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tax

Just did it few months ago.

You need to take possession outside of the 3 miles zone. International delivery.

The PO deliver the boat you touch nothing, you bring it back under sail.

Take pic with newspaper, GPS, sail up and draw letter with coordinate and all to sign

You then need to get the boat out of California before 90 days

Those are the precaution we took then make the change of ownership to Florida with USCG
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Old 30-12-2010, 18:01   #3
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Jesus Christ...I dont want to go political, but are you serious about taking delivery like that to avoid SALES TAX!???!!! This country's tax regime has gone absolutely off the charts zany...a story like this needs to be written about by Tom Clancy.
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Old 30-12-2010, 18:33   #4
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G'day, mate. What svletitgo detailed worked for us 13 years ago with no problems. If your looking for a monohull in the 50 foot range, let me know. No tax or duty if you buy it down here either. Cheers.
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Old 30-12-2010, 19:02   #5
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California "Regulation 1620. (Contd.)

(B) Shipments Outside The State - When Sales Tax Does Not Apply. Sales tax does not apply when the property pursuant to the contract of sale, is required to be shipped and is shipped to a point outside this state by the retailer, by means of:
  1. Facilities operated by the retailer or
  2. Delivery by the retailer to a carrier, customs broker or forwarding agent, whether hired by the purchaser or not, for shipment to such out-of-state point. As used herein the term "carrier" means a person or firm regularly engaged in the business of transporting for compensation tangible personal property owned by other persons, and includes both common and contract carriers. The term "forwarding agent" means a person or firm regularly engaged in the business of preparing property for shipment or arranging for its shipment. An individual or firm not otherwise so engaged does not become a "carrier" or "forwarding agent" within the meaning of this regulation simply by being designated by a purchaser to receive and ship goods to a point outside this state. (This subsection is effective on and after September 19, 1970, with respect to deliveries in California to carriers, etc., hired by the purchasers for shipment to points outside this state that are not in another state or foreign country, e.g., to points in the Pacific Ocean.) "
You can't accept delivery of the boat in California and avoid the sales tax. Google "California sales tax regulation 1620" for more info.

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Old 30-12-2010, 19:47   #6
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nervo, IIRC Florida will collect full Florida sales tax regardless of where you bought the boat UNLESS you have owned it for more than six months and/or paid sales tax outside of Florida. (In which case there may be a credit adjustment.)

So if you can avoid CA tax, get up to Oregon or Washington and burn 90 more days up there...then you might be able to document it in Florida (gotta be documented someplace, right? unless you're trucking it?) in order to bring it back east.

Meanwhile your insurer or financer may have something to say about the home port status of your vessel....that might be the stopper.
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Old 30-12-2010, 19:59   #7
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So if you can avoid CA tax, get up to Oregon or Washington and burn 90 more days up there...

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Old 30-12-2010, 20:17   #8
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If you bring the boat to FL, you will pay florida tax -- either as a use tax or a sales tax. If you pay some tax in CA, you'll get to use it as a credit against the FL tax. Play too many games and you'll wind up paying 2x.
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Old 30-12-2010, 20:59   #9
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G'day again, mate. Ditto on Charlie's logic. Oregon, been there, done that, unless your going "wide" to Hawaii, expect a long, bumpy ride to windward. Cheers.
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Old 30-12-2010, 21:15   #10
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Sales Tax in California

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Jesus Christ...I dont want to go political, but are you serious about taking delivery like that to avoid SALES TAX!???!!! This country's tax regime has gone absolutely off the charts zany...a story like this needs to be written about by Tom Clancy.

So, lets say you buy a big boat to live aboard, and lets say it sets you back $500,000. In California the tax rate starts at 8.25% and goes up from there ($41,250) and oh by the way, in California you also get to pay Property tax of about 1.1% ($5,500) every year. So, that first years tax is about $47,000!

I am looking to do a live aboard situation, and would certainly consider spending that much on a house here, but the tax on the $500,000 house would only be the property tax. Why would I buy a boat in this state?
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Old 30-12-2010, 21:33   #11
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As far as I know, with one exception, any state where you purchase a boat will charge you sales tax unless you remove if from that state within a deadline period, 30 to 90 days depending on the state.

If you are a FL resident, buy the boat out of state and bring it to FL within 6 months you will be charged sales tax. I think most other states have a similar policy for residents.

Only exception I have found is RI. No sales tax on boats, no property tax on boats. Move the boat there, register there and stay at least six months and you might avoid the sales tax.

Other option, FL now has a cap on the sales tax so you don't get hit quite so hard.
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Old 30-12-2010, 23:13   #12
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Not something to be toyed with in California. Get professional advice. They are aggressive. See this. My PO tried the cheap DIY method, got hit with the tax. They attached his bank account on the deadline day. Fun!
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Old 30-12-2010, 23:15   #13
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Jesus Christ...I dont want to go political, but are you serious about taking delivery like that to avoid SALES TAX!???!!! This country's tax regime has gone absolutely off the charts zany...a story like this needs to be written about by Tom Clancy.
That's quite correct. It is what I had to do. You can stretch the 90 days if you really must but Mexico might be more fun.

There's always Delaware if you are OK with using a Delaware corporation as owner. There will be corporate fees there but they are peanuts next to California taxes.
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Old 30-12-2010, 23:58   #14
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Tiger Wood's motor yacht was built in Portland, Oregon, one of the very few states that still does not have a sales tax.

Do people in California still take possession of their newly purchased boats in Ensenada, Mexico, to avoid sales tax, and then spend the season in the Sea of Cortez?
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Old 31-12-2010, 01:33   #15
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Ain't it great? The state, federal, and local governments have got us coming (income and payroll taxes) and going (property, sales, use, excise, fuel, and death taxes). Surely I've left out something major, like taxes on corporate income putting a major dent on dividends.

We need more people "pulling the wagon," but it is easier for politicians promising a free ride to get elected. The "free riders" will get you every time.
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